Honda sales still high despite tough competition

JAKARTA (JP): Motorcycle manufacturer and distributor PT Astra Honda Motor (AHM) said on Wednesday that competition from imported Chinese-made motorcycles in the last few years had not effected its sales figure in Indonesia.

AHM director Hiroaki Funami said that in fact domestic sales had increased more than 50 percent to US$477,000 last year, from $275,000 in 1999

Motorcycles from China, India, Korea, and Taiwan have been challenging the market ever since the government allowed the importation of completely-built-up motorcycles in late 1999.

A flood of imported motorcycles from China entered the Indonesian market in the middle of last year creating speculations that they would soon topple the Japanese dominated motorcycle market in the country.

At least 40 imported brands have been recorded by the Indonesian Association of Motorcycle Assemblers and Manufacturers (Pasmi).

However, Funami said some of the motorcycles imported from China were using Honda's patented decompression device for four- stroke engines without permission.

The device, which makes igniting motorcycle engines easier, was patented in 1995 under the Indonesian intellectual property rights and is valid and enforceable until 2005, he said.

A random examination of nine Chinese-made motorcycles between September and October last year revealed that seven of them were using Honda's patented decompression device, Funami said without disclosing the motorcycle brands.

"We welcome competitors as long as they do their business based on fair competition," he said, adding that fair meant that the competitors should not use Honda's patented inventions without prior permission.

Honda's lawyer Gunawan Suryomurcito explained that the patent law was passed to give inventors an opportunity to profit from their inventions for a duration of 20 years, after which the invention becomes public property.

He said the seven motorcycle importers had been notified of the transgression, but only one had complied with Honda's demand to withdraw such motorcycles from the market.

"We have also given them (importers) the choice of removing the decompression device from the motorcycles," Gunawan said, adding that it would, however, make the vehicles more difficult to start.

He said that Honda was looking for an amicable solution with the other six importers and hoped that it would not have to take legal action against them.

In the meantime the company would continue to investigate the transgression of Honda's patent by other Chinese brands in the country, Gunawan said.

"If they refuse to address the problem, we will take legal action against them, whether in the commercial or criminal court, according to the law on intellectual property rights," he added.

Pasmi chairman Ridwan Gunawan said that its members produced some 970,000 units of motorcycles in 2000 compared to about 590,000 the previous year.

They exported between 105,000 and 110,000 units, worth about $100 million, to the Philippines, Argentina, South America, Greece, China, and Malaysia last year.

Funami explained that Honda motorcycles are also meeting stiff competition from Chinese-made motorcycles in Vietnam.

As in Indonesia, sales of Honda motorcycles in Vietnam are also increasing despite the tight competition, he said.(tnt)